What is Auto Medical Payments Coverage And Is It Required?

Nov 23, 2020 | Personal Insurance

Auto Medical Payments Coverage

Car insurance protects your car, not the people inside of it and you must insure your passenger’s safety. Medical payments coverage protects you, your family members, and passengers of your vehicle at the time of the accident regardless of who is at fault.

It is a part of auto insurance and Medical Payments Coverage makes sure you are covered no matter what caused the crash. It also covers you if you’re injured while riding in someone else’s car or if you’re injured by a car while on foot, riding a bicycle, etc.

When trying to find ways to lower your car insurance rates, you may be tempted not to add medical payments coverage from your policy. After all, it might not be mandated in your state and sounds redundant to your health insurance.

What can be included in Medical Payments Coverage?

  • You or with your family member are driving and passengers are injured 

Regardless of who is at fault for the accident, everyone in your or your family member’s vehicle is covered.

  • You’re struck by a car while you’re out walking, running, or biking. 

If you’re the victim of an accident when you’re not in a vehicle, medical payment insurance has you covered.

  • If you’re a passenger in your friend’s car and you’re hurt in an accident.

No matter if your friend or the other driver is at fault, you can have peace of mind that your coverage has your back.

  • If the accident is fatal.

 If the worst-case scenario happens, medical payment coverage can help cover funeral expenses.

What expenses are included in Medical Payments Insurance?

  • Health insurance deductibles
  • Doctor and hospital visits
  • Surgeries
  • X-rays
  • Chiropractic treatment
  • Ambulance fees
  • Prosthesis
  • Dental care
  • Nursing services
  • Funeral expenses

With medical payments coverage, you get immediate effective coverage to help with any medical bills you or your passengers face after an accident. Plus, it can protect you if you get hit by a car while you’re on foot or a passenger in another vehicle, too.

This type of coverage can be particularly important for drivers who have no health insurance. But do not think about using it as a stand-alone policy. You need to carry auto liability coverage to purchase medical payments coverage, and you’d have to be injured in an auto-related accident to use it.

Difference Between Bodily Injury Liability and Medical Payments Liability

While bodily injury liability and medical payment insurance are separate from one another, they’re both major financial safety nets for drivers. The difference lies in who is at fault for the accident and who is protected by the insurance.

Bodily injury liability coverage helps pay for their medical bills and lost income as a result of injuries. Bodily injury liability coverage is subject to a limit, which is the maximum amount your car insurance policy will pay toward a covered claim, the per-person limit applies to each person hurt in a vehicular accident and the per-accident limit applies to each event in which multiple people are injured.

When searching for ways to lower your car insurance premium, you may be tempted to drop medical payments coverage from your policy. After all, it may not be mandated in your state and could seem redundant to your health insurance.

3 Types of Expenses Covered in Medical Payments Coverage:

If you are at fault for an accident that physically harms someone else, bodily injury liability coverage may assist pay for the following three types of costs:

  • Medical expenses: Bodily injury liability insurance helps pay for someone else’s emergency services and hospital bills if you caused a vehicular accident. It may also help cover their necessary follow-up doctor visits and other associated costs, like having to buy crutches or a wheelchair.
  • Compensation for lost wages and income: In the case that you crashed into another car, and the driver is severely injured and needs to have months of physical therapy. Or, maybe the person you injured loses wages because he cannot perform the normal duties of his work. Bodily injury liability coverage added to your car insurance policy might be able to help pay their compensation in this case. Your state’s laws may place limits on the amount of compensation the injured person can receive for lost income.
  • Legal fees: After an accident resulting in injuries, you could be taken to court by either the injured party or the injured party’s insurance company. This may require you to seek legal counsel, which can be costly. Bodily injury liability coverage may be able to help to pay for your legal fees.

When does the Medical Payments Insurance Coverage start?

The good thing about auto medical payments coverage is it kicks in before the hubcaps stop spinning to pay your medical bills, health insurance deductible, and co-pays. It includes many other upfront costs that your health policy probably won’t touch, such as ambulance fees, chiropractic, dental, prosthetics, and, when applicable, funeral expenses.

Medical payments to others that are also referred to as Coverage F on your policy are for small medical claims resulting from a guest injury on the insured premises (and off the premises in limited cases). Medical payments coverage is relatively inexpensive, adding about $5 per month to the cost of many policies.

This is because its use is restricted and its highest payout is low. Medical payments coverage limits in a standard policy are typical $1,000 to $5,000. That means if you have $5,000 in coverage and a houseguest’s injuries exceed that amount, the difference needs to be paid for out of pocket.

Although it’s limited and only intended for minor physical injuries, medical payments coverage can prevent the injury from escalating into a lawsuit. An injured houseguest may think twice about suing you if you offer to cover their hospital bills with medical payments to other coverage.

What is excluded from Medical Payments Coverage?

Medical payments to others coverage do not apply to injuries that are out of the following circumstances:

  • An injury was expected or intentional
  • The injury arises out of connection with a business that was conducted at the insured location (unless the business being conducted is related to the rental of the home on an occasional basis or if the home is being used in part as an office, school, studio, or private garage)
  • An injury arises out of failure to render professional services
  • The premises where the injury occurred is owned by you, rented to you, or is rented to others by you but isn’t insured
  • War
  • Communicable disease
  • Corporal punishment or physical or mental abuse
  • Controlled substances

However, the insurance company retains subrogation rights on payments made under your medical payments coverage. This means that if an insured driver is not the at-fault, the insurance company is entitled to be paid back when the at-fault driver’s insurance company accepts responsibility. This is one reason that medical payments coverage is generally less expensive than PIP coverage.

Difference Between PIP and Medical Payments Coverage

Medical payments coverage is very similar to Personal Injury Protection (PIP) in that both coverages will pay for physical injuries caused by an accident and because neither is concerned with who was at fault. The difference is that PIP insurance is more extensive; the coverage can also reach to cover other items such as your lost wages.

Personal Injury Protection

Pip is therefore slightly more expensive than medical payments coverage. Both PIP and medical payments coverage benefits rely entirely on whether the driver resides in a no-fault state or the regular tort liability state. Most states are in fact tort liability states and it is compulsory that the driver who was at fault and their insurance to pay damages to the victim’s car as well as any hospital bills.

Medical Payments under PIP

In some states, medical payments are covered under Personal Injury Protection (PIP), a type of car insurance, also known as no-fault insurance. PIP is available in certain states and pays medical expenses. PIP coverage varies between states, but can include:

  • Medical expenses: Ambulance/paramedic, doctors and surgeons, hospitalization, nursing care, medication, drugs and medical supplies, psychiatric care, imaging, laboratory tests, rehabilitation, prostheses, dental care, optical treatment, and chiropractic services. Not all states require 100% reimbursement; there may be a co-payment needed.
  • Funeral costs: Ceremonies, burial expenses, and cremation.
  • Lost income: Some or all of the wages lost because of injury. PIP may also cover the cost of temporary employees for insurers.
  • Child care and household costs: When injuries make it impossible to care for children or maintain the household, PIP can pay for these services.
  • Survivors’ Loss: PIP can cover the breadwinner’s wages for surviving children, a spouse, or family members.

When you’re injured in an accident, you file a claim with your insurer for PIP benefits – there’s no need to deal with the other driver’s insurer.

How much PIP is covered?

The cost of PIP coverage changes a great deal from state to state. This makes sense when you consider the wide range of mandatory coverage that must be bought.  Limits can vary from a low of $2,500 per accident to an extensive amount of medical expenses and permanent injury benefits of $250,000.

Because PIP is just one component of the mandatory coverage in no-fault states, its cost is not easy to break out. However, it is plausible to check the difference between the total average cost of auto insurance in no-fault states and tort states. 

Unfortunately, our personal injury protection insurance won’t help cover:

  • Property damage
  • The other drivers’ injuries in a collision
  • Any injuries from an accident while you were committing a crime, like fleeing the police
  • Injuries in an accident while you received payment for driving

Medical Payments Coverage Limits

Medical payments insurance has a coverage limit, which is the highest amount your insurance provider will pay for a covered loss. You can set your limit when you purchase coverage. Remember, you are responsible for any medical expenses that go over your coverage limit. If you need help determining a coverage limit that fits your needs, you may want to think about the cost of short-term emergency medical costs after a car accident. Your medical payments insurance could help with your health insurance deductible payment and some of your co-pay for your ER visit.

Are Medical Payments Required?

Medical payment coverage is required in two tort states, namely, Maine and New Hampshire. In other states such as Denver, Colorado, residents who choose to buy auto insurance must buy medical payments coverage as well however it is still optional.  When deciding whether you need this coverage, keep in mind that medical payments coverage and health insurance aren’t mutually exclusive.

Medical payments coverage can be a safety net in case you exceed your health plan’s limits or receive charges that it doesn’t cover, such as for chiropractic care or an ambulance ride. It also helps cover your health insurance deductible or pay for a car accident. In no-fault states, you can sue the other driver for these and other losses, but only when injuries are deemed critical or when medical expenses meet predetermined limits– you can’t claim pain and suffering for minor injuries.

If you do live in a no-fault state, you’re already paying for PIP. Adding medical payments coverage won’t make much sense in this case since it has a far shorter reach than PIP. However, medical payments coverage is very affordable and has some benefits.

One of these is the fact that medical payments coverage doesn’t have a deductible. This can be especially helpful if your PIP or health insurance coverage comes with a huge deductible. medical payments coverage is not a replacement for good health insurance coverage but can be a great way to supplement it.

Where your health insurance may not be as robust, medical payments coverage can add an extra layer of coverage. Health insurance covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over numerous persons.

We are here for you!

Every state has its differences regarding its regulations that are related to insurance policies, you may check your auto insurance agent in Denver, CO, or any other state. If you need help or clarifications regarding the information above, connect with us right now. Feel free to call us toll-free at 1(720) 221-8168 or chat with us right away.

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